BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) has been attempting to recover from a horrendous past few years that have seen the stock plummet from over $100 to under $8. While the good times may not be back in Waterloo yet, the tide is certainly changing.

With CEO John Chen at the helm, the company has steadied the ship, refocused on enterprise, and doubled down on company strengths, while letting lower-priority areas fall to the wayside. The result has been a leaner, more focused, and more devoted BlackBerry.

The latest masterstroke in this turnaround story is an acquisition that nobody would have expected.

BlackBerry acquires Good Technology

BlackBerry and Good Technology both announced the reported deal worth $425 million.

The deal is particularly large for BlackBerry—keep in mind the QNX acquisition back in 2010, the backbone of the BB10 OS and core to the IoT strategy, was for just $200 million—less than half of the Good deal.

The deal may initially seem odd. Good is a competitor to BlackBerry in the enterprise space, and BlackBerry is not the type of company to outright buy a competitor, preferring to purchase companies with technology and patents that can be leveraged to expand BlackBerry’s portfolio.

Keeping that thought in mind, here’s what Christy Wyatt, Good Chairman and CEO had to say about the deal: “Our trusted Good solutions will also help BlackBerry to accelerate its Internet of Things platform for managing endpoints beyond mobile devices.

The IoT Connection

The IoT (Internet of Things) is the concept of potentially billions of interconnected devices feeding information, diagnostics, updates, and all sorts of data back and forth.

It could be your car telling your smartphone that it is due for service and scheduling it for you. It could also be your alarm clock telling the coffee maker to start brewing a pot as you finally turned off the snooze.

BlackBerry’s vision for IoT is based on the idea that devices are interconnected using a common set of instructions, that in turn receive and transmit data via BlackBerry’s secure cloud—which already handles over 35 petabytes of data monthly.

Good is well known in the realm of cross-compatibility and has patents and certifications that BlackBerry does not, which is likely the IoT connection to this deal.

The potential growth from IoT is huge—consider that the IoT is targeted to be integrated in more than 25 billion devices in the next decade, and BlackBerry is already ahead of the game through the QNX operating system that is in a majority of car infotainment systems.

What’s next for enterprise and BlackBerry?

This deal is a win-win for BlackBerry. The company acquires a direct competitor in the enterprise space, which will boost numbers and contacts.

While there are other competitors in the mobile security landscape, BlackBerry is still considered the gold standard as far as security is concerned, with both top governments and companies entrusting their secure communications to BlackBerry.

The company will also gain access to the technologies and patents necessary to advance the IoT project. The IoT has the potential to become a multi-trillion dollar industry within a decade, and BlackBerry is one of a few companies leading the pack.

In my opinion, BlackBerry is extremely undervalued at the current price and represents a huge opportunity to investors. This deal will solidify already strong enterprise numbers, and the potential of the IoT project is nearly limitless.

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Fool contributor Demetris Afxentiou has no position in any stocks mentioned.